Briefly Legal

Few Democratic members of Congress have spoken up on the National Labor Relations Board’s unprecedented and extreme complaint against The Boeing Company for making a reasonable, legitimate management decision by building new production facilities in South Carolina. It’s a tough decision to defend, so those commenting have relied on a “process” argument — let the process work.

Senate Majority Leader Harry Reid hailed the NLRB as an example of the “checks and balances” envisioned by the Founding Fathers. Sen. Tom Harkin (D-IA) levied accusations, claiming, “Powerful corporate interests are pressuring Members of this body to interfere with an independent agency rather than letting it run its course.”

On Thursday, it was Sen. Richard Blumenthal’s turn to come to the Senate floor to defend the NLRB. The Connecticut Democrat made the most coherent, seriously framed argument based on process we’ve seen: “The NLRB and Lafe Solomon, the acting general counsel, have not only the right but the responsibility to investigate and act where the facts and the law establish a right and obligation to do so. So no one should be trying to prejudge this case before it goes before the administrative judge, and no one should be seeking a pass from the appropriate process, and no one should be seeking to intimidate or to interfere with this lawful proceeding. I come to the floor today because of the prospect of exactly that danger occurring.”

Yet one specific example Blumenthal cites is the decision by Chairman Darrel Issa (R-CA) of the House Oversight Committee to request documents on the Boeing complaint from the NLRB. But that’s the only example. Otherwise, the Senator seems to objecting to other elected officials publicly criticizing a federal agency.

These actions and some others are an attack on the integrity of the NLRB, an attack on its ability to make decisions and enforce the law as the Congress has instructed it and required it to do based on decisions involving the facts and the law alone. The NLRB is part of our justice system, and it should be given the opportunity to do justice in this instance. It should be given the opportunity to protect fairness and peace at the workplace, which is ultimately its mandate and its very solemn responsibility, and its tradition.

The NLRB is part of our justice system? Really? It does not behave that way. You have the NLRB’s public affairs office issuing press releases announcing the agency’s rulings against business and posting “Fact Checks” that are just political spin. Lafe Solomon commented publicly on the case, restating Boeing’s supposed offenses, before he retreated behind the protection of “let the process work.”

The agency is behaving as a political actor, and the complaint against Boeing is so at odds with the board’s mandate, solemn responsibility and tradition — to use Blumenthal’s terms — that silence would be an abdication of Congress’ oversight and policymaking responsibilities. If the NLRB’s complaint stands, the federal government will replace management in determining company locations and hiring. Such a radical restructuring of the U.S. economy and such an extreme expansion of federal power is at heart a policy matter, which in our system of government is the purview of Congress.

When an agency runs amok like the NLRB has done, it has abandoned process. That’s why the process arguments made by its defenders are just beside the point.

Rounding up the most recent news and commentary about the National Labor Relations Board’s complaint against The Boeing Company for locating new production facilities in South Carolina instead of the unionized Puget Sound region…

At Slate.com, Dave Weigel interviews Bill Gould, a former Democratic member appointed to the NLRB by President Clinton. From “Air Rage”

“The Boeing case is unprecedented,” he says. “I agree with much of what this board has done and is likely to do, but I don’t agree with what the general counsel has done in the Boeing case. The general counsel is trying to equate an employer’s concern with strikes that disrupt production and make it difficult to make deadlines—he’s trying to equate that with hostility toward trade unionism. I don’t think that makes sense.”

MM: Unbelievable, isn’t it? The federal government is now, through the NLRB, going to tell you where you can locate your plant. You know, a lot of these big, global businesses, their response to that might be well, I’ll locate my plant in Mexico. I mean, I think that this is truly outrageous. This is the same administration who has now tried to introduce politics into the procurement process by making people who do business with the government reveal their political support for candidates. This is a Chicago-style thuggish administration. In other words, agree with us, or we’ll find a way to punish you. (continue reading…)

The Senate Judiciary Committee has reported out a purportedly improved version of S. 623, the Sunshine in Litigation Act, but the legislation could still cast a cloud over the handling of business documents in federal court proceedings.

The original bill would permit plaintiffs’ lawyers to pry open sealed settlement agreements and documents closed under a judge’s order by asserting they could affect public safety or health. Trial lawyers have lobbied for the bill because it would make easier for them to acquire materials to use in alarmist campaigns against a company’s reputation. The legislation would make the discovery process even more expensive, useful leverage against a company to force a settlement.

Unfortunately, the health care law adds to business costs, and the United States has the highest corporate tax rate in the world, Alexander noted. Now, the National Labor Relations Board’s complaint against The Boeing Company sends a clear signal to large companies: Beware doing business in a United States burdened by this kind of anti-competitive government action.

[We] have a regulation from the National Labor Relations Board that may have the effect of law for 2 to 5 years that says it is prima facie evidence of an unfair labor practice if a company that is producing in a union State expands or moves to a right-to-work State. This is an assault on every middle-income Tennessean and on millions of middle-income Americans who have manufacturing jobs–certainly, everyone in the 22 right-to-work States. But as the Boeing chief executive said, it could be just as much of a disincentive to a State such as Michigan or Illinois or some other State that does not have a right-to-work law because why would you put a plant in Michigan if later you would not be allowed to put it in Tennessee? (continue reading…)

During the two days of committee discussion last week on the House’s medical liability reform bill, H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011, Rep. Henry Waxman (D-CA) and several fellow committee members defended litigation and trial lawyers from the (well-founded) accusations that lawsuits increase health care costs and detract from medical treatment.

Litigation actually works to improve quality, supplementing the work of the Food and Drug Administration in the regulatory approval of drugs, they argued. Uh huh. The term is “regulation through litigation,” and it’s an inefficient, expensive and counterproductive system of dual regulation, in which trial lawyers and juries of laymen replace scientific experts and testing in determining which drugs are allowable.

At one point, an apparently frustrated Rep. Brian Bilbray (R-CA) reminded the committee members of the real-world consequences of this kind of litigation: Lawsuits force drugs off the market that help people. People really suffer because of the cash-seeking litigation by trial lawyers.

Bilbray spoke passionately about the loss of Benedictin, an anti-morning sickness medication, taken off the market after The National Enquirer published an alarmist article, “New Thalidomide Scandal-Experts Reveal,” and thousands of lawsuits followed. As a consequence, his wife was deprived of a safe and widely prescribed drug she had used in previous pregnancies. She wound up in intensive care.

Rep. Bilbray:

This is one issue you don’t talk about. You had a treatment, Benedictin, that was used all over the country. There was a National Enquirer story in ’79. It ended up being lawsuit after lawsuit after lawsuit, with no scientific data, according to the FDA, to take it off the market. But sheerly by the harassment of litigation this product is no longer available to women across this country.

And my wife was one of those that went into intensive care, while she was in the first trimester of pregnancy, because the litigation drove that product off the market and denied her access to that product. And you know what physicians do now? … They prescribe the chief components of Benedictin separately, because the private sector cannot provide it because it was driven off the market through litigation, not through science.

So this does have an effect. It has an effect on what’s available for consumers. And I say this…Who do I get to sue? Who do I get to take to trial for those who drove this product off the market. Who do I get to point the finger at? Which lawyers do I get to litigate with who drove it off the market, because my wife didn’t a product that she had in her previous pregnancies, she didn’t have the ability to get the medication that is essential to not only her, but to her unborn baby. Who do I get to have justice with because this product was driven off? (continue reading…)

Mostly the story has percolated as new columnists catch up on the issue, as in George Will’s excellent piece over the weekend, “The Dreamliner nightmare.” (Datelined North Charleston, S.C., which means he was there. We saw Will rushing through Union Station last week, looking quite fit for a scribe who just celebrated his 70th birthday. Congratulations!)

The major substantive development was the introduction of S. 964, the Job Protection Act, by Sen. Lamar Alexander (R-TN) on Thursday, May 12. In his floor speech (here), Alexander explained:

The Job Protection Act, which I introduce today on behalf of 34 Senators, would preserve the Federal law’s current protection of State right-to-work laws in the National Labor Relations Act and provide necessary clarity to prevent the NLRB from moving forward in their case against Boeing or attempting a similar strategy against other companies.

Specifically, the Job Protection Act would, first, explicitly clarify that the board cannot order an employer to relocate jobs from one location to another; two, it guarantees an employer the right to decide where to do business within the United States; and, three, it protects an employer’s free speech regarding the costs associated with having a unionized workforce without fear of such communication being used as evidence in an anti-union discrimination suit.

We appreciate the Senator’s mention of the First Amendment protections, a underreported part of this controversy. The NLRB seeks to punish Boeing in part because several top executives spoke openly about the business costs of labor disruptions. If the board’s complaint stands, company executives could be deprived of their rights to say things like, “We’re concerned that a strike could make it hard to deliver our products and make us less competitive.” That’s not a threat of retaliation, that’s a statement of opinion that should always be protected free speech.

An internal NLRB memorandum, dated May 10, shows that the board wants to give unions much greater power over employers and their investment and management decisions.

Under current NLRB rules, companies can make major business decisions (like relocating a plant) without negotiating with their union — as long as those changes are not primarily made to reduce labor costs. For example, a business can unilaterally merge several smaller operations into one larger facility to achieve administrative efficiencies. Companies only have to negotiate working conditions, not their business plans.

The NLRB apparently intends to change that. In the internal memorandum, the board’s associate general counsel, Richard Siegel, asks the NLRB’s regional directors to flag such business-relocation cases. Siegel explains that the Board is considering “whether to propose a new standard” in these situations because the chairman of the NLRB, Wilma Liebman, has expressed her desire to “revisit existing law in this area” by modifying the rule established in a case called Dubuque Packing…. (continue reading…)

The 30-day comment period ended Friday for the Federal Motor Carrier Safety Administration’s proposed rules to put into effect the long-delayed cross-border Mexican trucking program required under the North American Free Trade Agreement. (Docket: FMCSA-2011-0097).

The Riverside (Calif.) Press-Enterprise offered a thorough report on the issue, albeit with a headline one can argue over, “Cross-border trucking and tariffs — hard to balance.” To exporters of agricultural and manufactured goods, it doesn’t seem that hard at all. The tariffs tilted the scales heavily in a bad direction, and enacting the cross-border trucking program restores the balance.

Much of the effect in California has been on agricultural products, including dates, table grapes, lettuce and other crops grown in eastern Riverside County. Dave Kranz, a spokesman for the California Farm Bureau, said the tariff on table grapes, as high as 45 percent initially, cost growers 70 percent of their Mexican market.

Doug Goudie, director of international trade policy for the National Association of Manufacturers, said adding on that kind of tariff drives away customers and damages American producers. Goudie said he knows of one Mexican firm that is buying potato products grown in Canada, which he said was absurd because the products had to move through the U.S. to get to the destination.

“If you have to add 25 cents to every dollar for everything you’re trying to sell, pretty soon a Chinese or a Canadian product looks a lot better,” Goudie said.

The important thing for the U.S. plaintiffs’ lawyers is to get their assertion on record that the insurance requirements are inadequate. Personal injury attorneys can then point to their regulatory submission to broaden the targets of their litigation from Mexican operators/insurers to more deep-pocket U.S. companies.

Reporting on shale gas and hydrofracturing, the public radio program Marketplace Morning Report today captures the classic American phenomenon at work: Innovation creates opportunity, investment and wealth, and trial lawyers follow with bogus, hyped, shake-down lawsuits.

Sarah Gardner: The U.S. is awash in natural gas. But the latest drilling technology that’s made the glut possible isn’t winning any popularity awards. “Fracking” involves a high pressure cocktail of water, chemicals and sand injected into shale rock — deep underground. Gas companies are drilling wells from Pennsylvania to Wyoming, and it doesn’t always go smoothly.

Richard Lippes: There have been explosions of homes, there’s a lot of people who can now actually light their water.

As for the assertion from Lippes, the trial lawyer, that there are many who can now actually light their water? It’s false, a claim that’s supposed to inflame NIMBY sentiment against natural gas development and scare up clients. One scene of a fellow lighting water in his kitchen sink appeared in the agitprop film, “Gasland,” but the claims about fiery faucets have since been refuted and the entire movie debunked.

The Marketplace report also covers that activities of New York lawsuit engine Marc Bern, who specializes in environmental claims. Next up? The class-action lawsuit. Bern declares: “Wherever there is shale and there is natural gas trapped underneath, there will be litigation.” Isn’t that the sad truth. Just as where there is any creation of wealth in the U.S. economy, there will be trial lawyers. The more wealth, the more lawyers, which makes shale natural gas such a tempting target.

“Trial,” the monthly magazine of the American Association for Justice, hyped environmental litigation in its March issue, “Poisoned wells: dangers of natural gas drilling,” a piece authored by another plaintiffs’ attorney, William S. Friedlander. Environmental activists and litigators often team up in campaigns against energy, both exaggerating the risks to increase their potential income via membership dues or settlements, respectively.

Do we want a prosperous society, a growing economy, and a strong manufacturing base fueled by affordable natural gas, or do we want an elite class of trial lawyers and winners of the litigation lottery? (continue reading…)

The NLRB is on very tenuous ground here and will almost certainly lose in court. But one expert in these matters was telling me yesterday he wouldn’t be surprised if the game is to try to harass Boeing into agreeing to some sort of card check-like process to unionize the South Carolina facility.

The term of art is a “neutrality agreement,” in which a company agrees with a labor union not to request a secret-ballot election if the union attempts to organize a facility. Often management goes that route after suffering a corporate campaign (or threat of a corporate campaign) in which the union blackens the reputations of the company and its executives.

But in this case, it’s the National Labor Relations Board leading the corporate campaign in support of the International Association of Machinists and Aerospace Workers.

The strategy make sense politically: Attack the critics, pummel the opposition into staying quiet. You can see it being played out in Congress, too. On Wednesday, Senate Majority Leader Harry Reid (D-NV), evoked the Founding Fathers and “checks and balances” into decrying any criticism of the NLRB. From The Congressional Record:

This kind of interference is inappropriate, it is disgraceful and dangerous.We wouldn’t allow threats to prosecutors or U.S. attorneys trying to stop them from moving forward with charges they see fit to bring to the courts, and we shouldn’t stand for this. It may not be illegal, but it is no better than the retaliation and intimidation that is the fundamental question in this case, and it should stop.

The Founders are telling critics of the NLRB to shut up? Well, in this case, it’s Congress and the states in the form of attorneys general that are providing the checks and balances to restrain a runaway federal agency.

Sen. Tom Harkin (D-IA) followed up Wednesday on the Senate floor, arguing in effect that the NLRB should be above criticism because it is an independent Executive Branch agency. The Senator conceded he did not know all the facts of the case, but knocked Boeing around and made the union’s arguments. He then declared: (continue reading…)